The economy is proving to be the key battleground for the 2010 general election. This is despite the fact that detailed policy promises on the critical economic issue - tackling the national debt through public spending cuts were conspicuous by their absence from the Labour and Conservative manifestos published last week (the Liberal Democrats bucked the trend by including an overview of their public spending plans). However, hard economic data could yet play a significant role in helping decide the election. As the Financial Times noted (external website) earlier this month:
With polls signalling a high chance of a hung parliament, economic newsflow during the campaign could tilt the balance.
This week is the critical week in terms of "economic newsflow" leading up to the election, as it will see the final releases for the current parliament on a range of critical indicators, including: inflation; unemployment; and economic growth.
But Friday (23 April 2010) will see the most critical data release: latest estimates on growth in gross domestic product (GDP) will indicate whether the UK economy has continued its recent return to weak econmic growth in the first quarter of 2010. Writing in the Guardian, Larry Elliott describes this as "the most eagerly awaited economic indicator during the entire election campaign" (external website). As the April 2010 economic commentary from XpertHR salary surveys notes:
The GDP data for the first quarter of 2010 - due to be published on Friday 23 April 2010 - have the potential to cost Labour the election, should they signal a collapse back into recession at the start of this year.Weak growth is widely expected to have been sustained in the first quarter of 2010, but this is by no means guaranteed. Recent comments from two prominent sources suggest ongoing anaemic growth at best:
- The British Chambers of Commerce (BCC) argues that the UK economy only just escaped slipping back into negative growth in the first quarter of 2010 (PDF format, 28.6K) (external website). The BCC said: "The Q1 2010 results indicate that the UK upturn is still on course, but the recovery is weak and the economy is facing serious risks."
- The CBI refuses to take a sustained return to economic growth for granted. CBI head of economic analysis Lai Wah Co comments: "Growth in the economy looks to have held up over the first quarter, albeit at a slow rate, but there are still uncertainties about the strength and sustainability of the recovery this year."
As always, XpertHR will keep you up to date with latest developments on each of these key measures.
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